Chapter 4

The Internal Assessment

Strategic
Management:
Concepts & Cases
11th Edition
Fred David

Ch 4 -1
Nature of an Internal Audit

Basis for Objectives & Strategies

■ Internal strengths/weaknesses
■ External opportunities/threats
■ Clear statement of mission

Ch 4 -2
 Internal Audit

Parallels process of external audit

•Information from:
•Management
•Marketing
•Finance/accounting
•Production/operations
•Research & Development
•Management Information Systems

Ch 4 -3
Resource Based View (RBV)

Approach to Competitive Advantage

Internal resources are more important

than external factors

Ch 4 -4
Resource Based View (RBV)

Three All Encompassing Categories

1. Physical resources
2. Human resources
3. Organizational resources

Ch 4 -5
Resource Based View (RBV)

Empirical Indicators

▪ Rare
▪ Hard to imitate
▪ Not easily substitutable

Ch 4 -6
Integrating Strategy & Culture

Organizational Culture

Pattern of behavior developed by an

organization as it learns to cope with its
problem of external adaptation and
internal integration…is considered valid
and taught to new members

Ch 4 -7
Integrating Strategy & Culture

Value
s Belief
Lege
nds s

Hero Cultural Rites

es Products

Symb Ritual
Myth
ols s
s

Ch 4 -8
Management
Stage When Most
Function Important
Planning Strategy Formulation

Organizing Strategy Implementation

Motivating Strategy Implementation

Staffing Strategy Implementation

Controlling Strategy Evaluation

Ch 4 -9
Marketing

Customer Needs/Wants for Products/Services

1. Defining
2. Anticipating
3. Creating
4. Fulfilling

Ch 4 -10
Marketing
Marketing Functions

1. Customer analysis
2. Selling products/services
3. Product & service planning
4. Pricing
5. Distribution
6. Marketing research
7. Opportunity analysis

Ch 4 -11
Finance/Accounting
Finance/Accounting Functions

1. Investment decision (Capital budgeting)

2. Financing decision
3. Dividend decision
4. Financial analysis – Key financial ratios

Ch 4 -12
Production/Operations

Production/Operations Functions

▪ Process
▪ Capacity
▪ Inventory
▪ Workforce
▪ Quality

Ch 4 -13
Research & Development

Research & Development Functions

▪ Development of new products before

competitors
▪ Improving product quality
▪ Improving manufacturing processes to
reduce costs

Ch 4 -14
Management Information
Systems

■ Information Systems
■ CIO/CTO
■ Security
■ User-friendly
■ E-commerce

Ch 4 -15
Ch 4 -16
Ch 4 -17